Brazil’s Petrobras: latest subsalt oil find opens new frontier

Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said late Monday that a new subsalt oil discovery opens a new exploration frontier in the Santos Basin, where billions of barrels of crude have already been discovered.

The first well drilled in the offshore BM-S050 block, dubbed Sagitario, was found to contain high-quality oil, Petrobras said. Petrobras operates the block with a 60% stake. The local unit of BG Group PLC (BG.LN) holds 20%, while Repsol Sinopec Brasil retains the remaining 20%.

The discovery is significant because it was made to the west of the cluster of oil discoveries made deep under a thick layer of salt off Brazil’s Atlantic Ocean coast in the mid-2000s. The Lula field, which holds estimated recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent, or BOE, and is currently producing about 100,000 barrels a day, and the Sapinhoa field that started pilot production earlier this month both sit due east of the Sagitario discovery. Sapinhoa is estimated to hold recoverable reserves of 2.1 billion BOE.